©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1 1 Online and Mobile Advertising

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter Objectives After reading this chapter you should be able to: 1.Appreciate the magnitude, nature, and potential for online and mobile advertising. 2.Describe how the online advertising process works. 3.Understand the various forms of online advertising: search engine advertising, display or banner ads, rich media, websites and sponsorships, blogs and podcasts, advertising, mobile advertising, and advertising via behavioral targeting. 2

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter Objectives (cont’d) 4.Describe the nature of mobile advertising: its forms (e.g., short message services, location-based services), benefits and costs, and strategies. 5.Understand the issues associated with privacy and online behavioral targeting. 6.Appreciate the importance of measuring online advertising effectiveness and the various metrics used for this purpose. 3

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Mobile Headache: The Excitement and Challenges of Mobile Advertising 4 Mobile ad spending is expected to grow to $2.5 billion by 2014 Versatile: Moving from SMS texts -> Web -> apps -> games -> social media Excellent international platform for growth Yet…. More apps (e.g., “Angry Birds”) don’t always equal better apps Fit with company? strategy? Not IT driven (rather, short 30-day program cycles driven by consumers) May have to make tough decisions in moving ad spending from traditional media Mobile ad spending is expected to grow to $2.5 billion by 2014 Versatile: Moving from SMS texts -> Web -> apps -> games -> social media Excellent international platform for growth Yet…. More apps (e.g., “Angry Birds”) don’t always equal better apps Fit with company? strategy? Not IT driven (rather, short 30-day program cycles driven by consumers) May have to make tough decisions in moving ad spending from traditional media

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Mass Online Advertising Internet is not a replacement, but a key element of IMC programs Dating back only to 1994, the “Web” has become an important medium for Internet advertising. Online advertising spending amounted to over $9.6 billion in 2004 (~4% of all advertising), $29 billion in 2012 (~17% of all advertising), and is estimated to grow to $40 billion by

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Many Options for Placing Ads and Promotions Online Company Websites (e.g., Banner ads (click-through rates only.3%; B2B>B2C; brand familiarity; yet attention?) Sponsorships and Microsites (small area paid for by external co.) Rich Media: Interstitials/Superstitials/pop-ups/ online video ads Browser ads (viewer is paid to watch ads) Alliances and affiliate programs (e.g., AOL and Amazon; Push technology (e.g., Real Video; Infogate/AOL) Search engine advertising (keywords/targeted content; 40% of online ads), blogs ( podcasts (audio blogs; ) (Nielsen/McKinsey NMIncite tracks/ analyzes blogs) ads (opt-in versus opt-out; e-zines; wireless; mobile phone/ text messaging) Mobile Advertising (Google Goggles) Social Media: Facebook, MySpace, Twitter, YouTube, Second Life, LinkedIn, Pinterest, Flickr... ( tracks/analyzes) 6

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Online Advertising: Benefits and Costs Individualization Interactivity Immediate publishing Cost efficiency User distraction Too many choices International coordination Rapid change Short lead times 7

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Figure 13.1: The Online Ad Process 8

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Purchasing Keywords and Selecting Content- Oriented Websites Keyword Matching Advertising Prospective advertisers bid for keywords by indicating how much they are willing to pay each time an Internet shopper clicks on their website as a result of a search (cost per click). (Google Ad Words: 9

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Content-Targeted Advertising AdSense: sponsored by Google, this program enables advertisers to run ads on sites other than Google’s own site. Google then acts as an ad agency placing ads and receiving a commission (e.g., 20%). Recently expanded to mobile content and RSS (Really Simple Syndication) feeds used for publication (e.g., a blog entry). 10

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types and Sizes of Internet Marketing Units (IMUs) 11

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Rich Media: Pop-Ups, Interstitials, Superstitials, and Video Ads Pop-Ups: Ads that appear in a separate window. Interstitials: Ads that appear between two content Web pages. Superstitials: short, animated ads that play over or on top of a Web page. Online video ads: audio-video ads that are similar to 30-second TV commercials, but are shortened to seconds and compressed. 12

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Websites (advantage: sought by consumer versus stumbled upon) Uses for Websites As an advertisement for the company As a venue for generating and transacting exchanges between organizations and their customers As a link to other integrated marcom communications Well-Designed Websites Are easy to navigate Provide useful information Are visually attractive Offer entertainment value Are perceived as trustworthy 13

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Mobile Advertising 2015: 4.9 billion phones worldwide; 2014: U.S. ad spending doubles to $2.55 billion Google Goggles 14

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Measuring Internet Ad Effectiveness (1) How many visited a particular Web site? (2) How many people clicked through a particular web ad? (3) What are the demographic characteristics of these people? (4) What actions were taken following click-throughs? (and cost per action, e.g., registration, purchase) 15

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Measures of Effectiveness for Internet Advertising Viewers (stay on site/page): number of viewers to a site (and unique viewers) Ad views/page views/impressions: the number of times viewers see a Web page with an ad. (Used to calculate cost per thousand or CPM). Hits (leave the site or home page): number of times a specific component of a site is requested/clicked on. Clicks/click throughs: the number of visitors to a site that click on an ad to retrieve information. Click through rate: % of ad views that result in an ad click. (Cost per click (CPC) can be calculated) Cost per thousand (CPM) example for “go.com”: CPM = $10,000 per mo. x 1000 / 500,000 views per mo. = $20 16

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Internet and Advertising Problems Privacy and Behavioral Targeting (online profiling via cookies and marriage of online and offline data: Double Click; Children’s Online Privacy Protection Rule) Opt-in and opt-out battles SPAM (unsolicited commercial 2/3 of all commercial ) Phishing and international fraud (credit card #s, social security #s, ATM #s) Click fraud with search engine advertising 17